FAQs

If you have a question which isn’t answered below or elsewhere on our website, please contact us by email (info@gpcsipp.co.uk) or talk to us on 01254 660333.

What is a Self Invested Personal Pension?
How much can I contribute into my scheme and receive maximum tax relief?
What tax relief will I receive?
What can I invest in?
Can I transfer existing assets into my SIPP?
Can I sell a commercial property that I currently own personally to my SIPP?
Is it possible to purchase a property that is VAT registered?
Can I transfer my SIPP elsewhere?
When can I retire?
What happens on death?
Do any of my SIPP benefits form part of my estate for Inheritance Tax purposes on death?

- The more risk you are willing to take with your chosen investments can provide a potentially higher return, but there is a greater chance of loss. Lower risk investments offer greater security but lower potential returns.

- The amount of time left until you retire should be taken into account when choosing which funds are appropriate.

What is a Self Invested Personal Pension?

A SIPP is an HMRC registered pension scheme with a wide investment remit including commercial property. A Self Invested Personal Pension (SIPP) is a personal pension which allows you to save in a tax-efficient manner for your retirement. This gives you more control and flexibility than other pension arrangements. Being self invested, you make your own investment decisions in conjunction with advice from your financial adviser.

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How much can I contribute in to my scheme and receive maximum tax relief?

There is no limit on the amount of member contributions that may be paid into the SIPP, but there is a limit on the amount of tax relief a member may receive on contributions paid by,or on behalf of the member. For tax relief purposes, member contributions are restricted to the greater of the individual’s Relevant UK Earnings or £3,600 (subject to the annual allowance of £40,000 -2015/2016 Tax Year).

Employers can also make contributions on your behalf, within the above limit. Employer contributions will be paid gross and the employer will usually be able to claim the contribution as a business expense. Employers may be able to make contributions at a higher level than an employees earnings. If this is being contemplated, the employer should consult with the inspector of taxes to make sure the contribution is not deemed excessive.

An “In Specie” contribution can also be made. This is a contribution made by transferring an asset held personally, to the SIPP. An employer may also choose to make an “in-specie” contribution to the SIPP. An In Specie contribution is in lieu of a monetary contribution and is subject to certain conditions being met.

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What tax relief will I receive?

The amount you contribute is normally paid net of basic rate tax. GPC SIPP Ltd will reclaim the tax relief on this contribution from the HMRC. If you are a higher rate taxpayer you should reclaim the higher-rate directly from the HMRC.

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What can I invest in?

A SIPP can invest in the following:

- Stocks and Shares
- Cash Deposits
- Authorised Unit Trusts, OEICs & AIMs
- Trustee Investment Plans
- Stocks & Shares quoted on the Stock Exchange
- Gilts or other Loan Stocks
- UK Commercial property
- UK Agricultural land
- UK Commercial forestry
- UK Student accommodation
- UK Nursing Homes
- UK Hotels
- UK B&Bs
- UK Youth Hostels

NB. Residential property whether in the UK or abroad is a taxable investment of a pension scheme and would be subject to tax. Residential property is not currently permitted within the GPC SIPP.

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Can I transfer existing assets into my SIPP?

You may be able to transfer existing assets that you own into your SIPP at the Trustees discretion.

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Can I sell a commercial property that I currently own personally to my SIPP?

Yes. With the abolishment of the connectivity rule this gives schemes much more opportunity to invest in company and even member assets. A SIPP now has the ability to purchase commercial property that is currently owned by the member or their company whether by using existing scheme funds to purchase the premises or by transferring the ownership of the property by way of a contribution, otherwise know as an in-specie contribution, subject to certain conditions being met.

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Is it possible to purchase a property that is VAT registered?

It is possible for the Trustees of the SIPP to register for VAT purposes so that any VAT paid on the property purchase can be reclaimed. We recommend that you take advice from your Accountant or a tax expert regarding the suitability of registering for VAT.

GPC SIPP are able to complete the necessary documentation to register the scheme for VAT, and also complete the quarterly VAT return, for an annual fee as per our fee schedule.

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Can I transfer my SIPP elsewhere?

You can transfer your SIPP at any time. A SIPP from which you are drawing income can only be transferred if the receiving Provider is prepared to accept a SIPP in drawdown.

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When can I retire?

You can draw benefits at any time from age 55 (possibly earlier, if due to ill health).

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What happens on death?

If death occurs before benefits are taken, and before age 75, then amounts up to the lifetime allowance (£1.25million in 2015/2016) can usually be paid as a tax free lump sum. If death occurs after age 75 any beneficiary can draw down as a pension at their marginal rate of tax or if a lump sum is to be taken this will be charged at 45% of their marginal rate of tax from 2016-2017.

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Do any of my SIPP benefits form part of my estate for Inheritance Tax purposes on death?

As the GPC SIPP is written under trust, any lump sum paid on death is normally paid at the Trustee’s discretion and hence falls outside of the members estate for inheritance tax purposes.

Members should ensure that the SIPP Administrator is provided with a Nomination of Beneficiaries form whereby the member nominates their preferred recipients of any lump sum for the Trustees to consider.

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